After the last Fed Rate Cut, DIA broke the support levels of 135. Since breaking support, DIA looks like it is now creating a rounded top. This rounded top indicates DIA will pull back to 137, or possibly 135. It is also possible that DIA could be creating a complex head and shoulder reversal, but either way the outlook for DIA is bearish.

On Wednesday, October 31 we have the next FOMC meeting. That meeting will dictate the direction of the market into the Christmas holiday. Based on the bearish formations in DIA, I believe we will see a pullback in DIA before the next FOMC meeting.



Andy Swan is co-founder and head trader for DaytradeTeam.com. To get all of Andy's day trading, swing trading, and options trading alerts in real time, subscribe to a one-week, all-inclusive trial membership to DaytradeTeam by clicking here.